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BACK             Issue No. 1/2005
 Oman's Rating by OECD among the top

 General Steering Committee Meeting in & Country Risk Conference held in Paris

 ECGA received the Award as well as congratulated five of its credit insured exporters for His Majesty Award & 5 others for Appreciation Certificates

 ECGA of Oman signed Memorandum of Understanding with Saudi Fund for Development

  Board of Directors reviewed ECGA’s performance

 ECGA Participated in the Prague Club Meeting in Sarajevo, Bosnia

 Islamic ECAs meeting held in Tehran

 Administration Officer Development Program held in Dubai


Recognition of Ten Years of Services

Country Profile of Buyers of Omani Insured Exports

 Questions & Answers

 Hint to Exporter

 Modes of Payments on Sales Transactions Covered by ECGA

 The Omani Insured Exporter by ECGA

 Congratulatory Message

 
Oman's Rating by OECD among the top
The Organization of Economic Cooperation and Development (OECD) under its latest country risk classification has rated Oman among the top in the emerging non-OECD markets. Oman was rated at 2 from scale of 1 to 7. It was second to Taiwan and similar to Brunei, Chili, China, Hong Kong, Hungary, Kuwait, Malaysia, Macau, Poland, Qatar, Slovenia, Trinidad & Tobago and UAE. The list rated 144 non-OECD countries world - wide.

 
General Steering Committee Meeting in & Country Risk Conference held in Paris
The General Steering Committee of the Credit Alliance Network held its meeting in Paris followed by Country Risk Conference on January 24th and 25th respectively. The General Manager of ECGA Mr. Nasir bin Issa Al-Ismaily who is also a member of the General Steering Committee and Regional Coordinator for Africa-Middle East Group attended the meeting and the conference. The country risk conference assessed the developments of the past year and the main trends shaping the world economy.

 
ECGA received the Award as well as congratulated five of its credit insured exporters for His Majesty Award & 5 others for Appreciation Certificates
The Export Credit Guarantee Agency SAOC was presented with the Award by Ministry of Commerce and Industry during the special occasion to mark this His Majesty's Cup for Best Five Industries for the year 2004 for its contribution in supporting Omani non-oil export. All the five selected winners of the best factories were among the active policyholders of ECGA who have utilized the services of the Agency effectively through the year by actively pursuing exports while managing their export credit policies prudently. (Congratulatory Message Page 8) The Agency has been providing its export credit insurance protection and other services to the Omani exporters through the years for which they have highly valued its benefits in terms of promoting and encouraging Omani non-oil exports to various international markets.

 
ECGA of Oman signed Memorandum of Understanding with Saudi Fund for Development
Export Credit Guarantee Agency (S.A.O.C) of the Sultanate of Oman signed Memorandum of Understanding (MOU) with the Saudi Export Program of the Saudi Fund for Development. The Memorandum include various areas of cooperation such as exchanges of information on buyers and banks, assistance in recoveries, exchanges of experiences on claim payments, training, etc. Saudi Fund for Development as with ECGA of Oman are both members of the Credit Alliance Network as well as the Prague Club.

 
Board of Directors reviewed ECGA’s performance
The Board of Directors of Export Credit Guarantee Agency presided by H. E. the Chairman Sheikh Yaqoob bin Hamed Al Harthy reviewed the performance report of the Agency of the year 2004 at its meeting. The report provided the assessment of the performance of the Agency’s operational as well as financial position. The Board was pleased with the performance of the Agency as supported by various encouraging operational and financial indicators. The Agency remained self- sustaining while extending its credit insurance services to increasing number of Omani exporters.

 
ECGA Participated in the Prague Club Meeting in Sarajevo, Bosnia
The Prague Club held its second half of the year 2004 meeting in Sarajevo, Bosnia - Herzegovinia hosted by the Investment Guarantee Agency of Bosnia (IGA) from 29th November to 1st December 2004 in coordination with the Secretariat of the Berne Union. The General Manager of the Export Credit Guarantee Agency – Mr. Nasir bin Issa Al-Ismaily participated in its meetings along with representatives from Export Credit Agencies (ECAs) in other countries. The updates of developments of respective ECAs following its May 2004 meeting in Warsaw, Poland were reviewed by its members. In addition, the highlights of the performance of the ECAs members for the year were discussed which included underwriting matters, payment of claims, collection and trading experience by the members to various countries.. In addition, respective presentations from a number of ECAs as well as International organizations including Multilateral Investment Guarantee Agency (MIGA), OECD and the World Bank were presented during the meeting.

During the Sarajevo meeting, the Iceland Export credit Agency was formally admitted as a new member of the Club for which it has commenced its export credit insurance activity recently. Thus the total number of ECAs in the Prague Club has now grown to 25 to different countries.

The Prague Club is an association of national ECAs from a number of countries in Eastern & Central Europe, Arab World, Africa and Asia. It also includes multilateral ECAs such as the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), Inter-Arab Investment Guarantee Corporation (IAIGC) as well as African Trade Insurance Agency. The Club operates under the auspices of the Berne Union that is the International Union of Credit & Investment Insurers. ECGA of the Sultanate of Oman became the first ECA from an Arab country to be qualified and became a member of the Prague Club in the year 2000.

 
Islamic ECAs meeting held in Tehran
The 4th Meeting of the Export Credit Agencies of the Islamic countries was held in Tehran, Iran on 13th and 14th December 2004 organized by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) of the Islamic Development Bank Group and hosted by the Export Guarantee Fund of Iran for which Export Credit Guarantee Agency (ECGA) of the Sultanate of Oman was invited. ECGA of Oman participated along with 20 ECAs from different member countries of the organization of the Islamic Conference Organization as well as invited guests from the Asian Development Bank and Coface. ECAs members include Algeria, Bahrain, Bangladesh, Benin, Brunei, Burkina Faso, Cameroon, Chad, Egypt, Gambia, Guinea, Indonesia, Iran, Jordan, Kazakhstan, Kuwait, Lebanon, Libya, Malaysia, Mali, Mauritania, Morocco, Niger, Pakistan, Qatar, Saudi Arabia, Senegal, Sudan, Syria, Tunisia, Turkey, UAE, Uganda and Yemen.

Various topics were discussed during the 2 days meeting which included developments in member country ECAs, performance of ECAs in ICIEC member countries, developments in the export credit insurance industry as well as cooperation between ICIEC and ECAs in member countries. Mr. Nasir bin Issa Al Ismaily, the General Manager of ECGA chaired the session on "Cooperation among ECAs in Islamic countries" in the areas of underwriting, credit information, technical cooperation and technical assistance. The meeting offered timely opportunity to discuss different challenges ECAs from Islamic countries are facing in the export credit insurance industry and provide unique platform to reinforce cooperation and further develop their business relationships.

In addition, the meeting discussed various other areas of cooperation in the fields of business development and reinsurance facilities. Three new members were admitted in the Association. There included the State Insurance Corporation for the Insurance of Export Credit and Investment of Kazakhstan (KECIC), the Lebanese Credit Insurance of Lebanon (LCI), Sheikan Insurance and Reinsurance Co. of Sudan (Sheikan) and the National Export-Import Insurance Company of Uzbekistan (Uzebikinvest).

 
Administration Officer Development Program held in Dubai
Mr. Ahmed Mohd Al-Abdaly – Administration Officer of ECGA attended the course entitled The Administration Officer Development Program (Office Management & Effective Administration Skills) organized by GLOMACS Training & Consultancy – Oxford Management Centre in Dubai, UAE from 25 to 29 December 2004. The course dealt with office management and effective administration skills.
Recognition of Ten Years of Services 
Mrs. Sheikha bint Habib Al-Ma'waly completed 10 years of service since she joined ECGA. To mark this occasion, she was awarded with the memorable gift from the Agency presented to her by the General Manager, of ECGA.

Mrs. Sheikha commented: "I am very much proud with ten years of services with Export Credit Guarantee Agency SAOC for which I managed to acquire considerable work experience and knowledge which eventually led me to work as Secretary of the General Manager.

In my effort to improve on my career, ECGA has provided me with various training opportunities so as to be able to undertake my duties and job more efficiently. I appreciate greatly for valuable support of the management as well as cooperation of my colleagues and other staff of Agency through the years."

 
COUNTRY PROFILE OF BUYERS OF OMANI INSURED EXPORTS - TANZANIA

Tanzania is situated in East Africa. Its capital is Dar-es Salaam. It’s covers total area of 945,087 square kilometers (includes the islands of Mafia, Pemba and Zanzibar). It has a population of 36,588,225 (December 2004 est.).

Export Credit Guarantee Agency (SAOC) has insured Omani exports to various products to Tanzania. These include detergents, fences, dairy products, pipe & fittings, chemicals products, biscuits, agricultural products, acrylic, marine products etc. The total credit limits issued by the Agency till December 2004 amounted to R.O.576500 to 15 buyers (R.O. 400,000/- or almost 70.6% under letters of credit and remaining 29.4% or R.O. 176500 /- are on Open Account). Since ECGA’s inception, total business declared by policyholders to Tanzania were RO.301,798/-. The Agency has not paid any claims on buyers to Tanzania yet.

The Omani exports and imports to Tanzania for the last 5 years are listed below. Oman has maintained a net trade surplus with Tanzania for the last 5 years.



 
1999
2000
2001
2002
2003

Exports

29,695,800

21,982,742

22,726,218

27,388,252

4,625,849

Imports

328,926

663,395

533,272

236,734

229,163

Surplus

29,366,874

21,319,347

22,192,946

191302897

4,396,686





As per the latest publication of International Trade Finance Magazine May 2003, issue No. 428, in its survey highlights in Tanzania it states as follows:-

"Virtually all shipments are on open account. Importers are slow to pay locally, usually requiring three to four weeks. Banks execute exchange transfers in two months". The collection experience is Fair-Good while preferred terms of payment are unconfirmed letters of credit.

A number of ECAs provide short term cover for Tanzania including US Eximbank, Atradius, ECGD UK, Euler Hermes.


 
Questions and Answers
Q- How the Export Credit Policy help to raise financing?
A-The Export Credit Policy is normally recognized by the commercial banks as a valuable form of an additional security. If necessary the exporter can assign the benefits of the policy to his financing bank which allows ECGA to pay claims directly to the Bank. In consequence the credit insured exporter can expect to enjoy improved financial facilities and in many cases through relatively lower interest rates.

Q- Should application by an exporter for a credit limit be supported by trading experience?
A- Applications for credit limits made by an exporter (policyholder) may be supported by trading experience but must be supported by any adverse knowledge or experience e.g. overdue debt existing at the time an application is made.

Q- How does ECGA maintain the quality of its information on overseas buyers?
A- ECGA is constantly striving to seek better and speedier sources to meet the demands on its services to its Omani exporters. Information from all existing sources are under constant watch and if quality or speed of performance fall below per action is taken to seek improvement. New sources of information are being tested all the time an employed to supplement existing contacts.

Q- Are cancelled credit limits applicable to outstanding debts?
A-
Cancelled credit limits continue to apply to outstanding debt in respect of shipments made prior to date of cancellation, but not to future shipments.


Hint to Exporter
 
  The total amount of trade credit that a company grants depends on the value of credit sales and the length of the credit period. The risk can be controlled by limiting the number of credit transactions or the credit period.

  Heavy reliance on a single customer for sales' turnover can create a very high credit risk. Exporter should be aware of how much credit it can afford to give to such a customer, recognizing the possible consequences of non- payment or of consistently late payments.

  The potential cost of a credit risk could be and interest cost from late payment or bad debt written off. The cost of bad debt is usually measured as the full amount owed.



THE OMANI INSURED EXPORTER BY ECGA 
REEM BATTERIES & POWER APPLIANCES CO.

Reem Batteries and Power Appliances Co. SAOC is one of the leading manufacturers of Dry Charged and Sealed Maintenance Free automotive batteries in the Middle East. Part of the Omzest group in the Sultanate of Oman, it was set up in technical collaboration with Johnson Controls Inc., of the USA and manufactures over 175 types of batteries, conforming to various international standards. The company is certified under ISO 9001: 2000 and has twice been awarded His Majesty’s Cup as one of the top five factories in the Sultanate of Oman.


By dint of their quality, service backup and effective utilization of ECGA’s services, the company’s products are now available in almost 50 countries across the world. These include the entire Middle East, rest of Asia, several countries in Europe, South America and Africa. The company exports its products under several well-known brands and its sales has shown a steady rise over the years. The company, apart from its strong presence in the after market, is also dubbed as a ‘Manufacturer’s Manufacturer’ - as it is also an approved supplier to other internationally reputed battery manufacturers in Europe.


CONGRATULATORY MESSAGE 
"The Omani exporters have long recognized and appreciated that one of the major keys to success is to insure with ECGA for safe export business. The Agency provides confidence, encouragement and incentive in support of its services to exporters during the past ten year."

ECGA is here to help you minimize your risks

BUYER’S RISK
COUNTRY RISK
   buyer’s insolvency/bankruptcy

   buyer’s failure to pay

   buyer refusing delivery of goods


   foreign exchange transfer delay

   import bans or cancellation of import licence

   payment moratorium

   war, civil disorder, natural disasters

Other benefits of service provided to credit insured exporters include domestic credit insurance, post shipment financing through bills discounting by commercial banks as well as issuance of guarantees to commercial banks for pre-shipment financing needs of the exporters.
   
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